Our changing state

Published July 23, 2020

By Tom Campbell

North Carolina, like the nation, is facing three crises: COVID-19, racial strife and the economy. Everyone wants to return to the way things were before the virus, but that’s not going to happen.
Few were prepared for the coronavirus and the shutdown of businesses. Most have reopened, but many cannot or have chosen not to do so. Even those that reopened report their revenues haven’t revived; the public doesn’t yet feel safe in shopping, eating or visiting. 
There are some bright spots. Last week we learned North Carolina’s unemployment rate dropped from May’s 12.7 to 7.6 percent in June. We added 173,000 jobs but still have 340,000 fewer jobs than one year ago, when the unemployment rate was almost half what it is now. The employment picture will improve, but very slowly. 
Many changes will become permanent. Both workers and employers discovered that working from home might not be as productive as being together on site, but they could function relatively well. Companies discovered they don’t need nearly so much office space, so vacancy rates will increase as leases expire.  Workers learned it doesn’t matter where they work and can choose where they want to live. Expect to see relocations as workers seek less expensive housing, less congestion and closer communities.  
If shoppers weren’t already accustomed to online purchasing, they developed the habit quickly, buying everything from groceries, clothing, and meals online, through delivery or takeout. Many won’t return to brick and mortar stores.
Instead of traveling long distances we now Zoom, Facetime or Skype, saving both time and money. Many are wary of cramped seating, recirculated air and inconvenient air travel and passenger numbers have dropped precipitously. American Airlines reported they are furloughing 2,600 employees in our state. Airlines, along with many other businesses, received government loans which required them to retain their employees, but that requirement expires September 30th. Furloughs begin October 1. Large numbers of us, tired of being confined, are rediscovering and visiting our many state resorts and parks.  Our travel habits have likely changed permanently.
There are two additional factors adding to our state’s economic woes. Approximately 600,000 unemployed North Carolinians have been cushioned from economic calamity by the $600 weekly federal unemployment benefit but it expires July 31, and our Congress is embroiled in such divisive political arguments we don’t look for its continuance, at least anytime soon.
Our state’s unemployment insurance program adds insult to displaced workers. Ours is frequently described as the stingiest in the nation. In 2013 the legislature drastically cut the benefits. Prior to the new law the unemployed could receive as much as $535 in weekly benefits (average of $275) for a period of up to 20 weeks. The new law cut the maximum to $350 and the benefit period to 13 weeks. We have some $3 billion in the state’s unemployment trust fund to help the unemployed, but our legislators are unwilling to increase benefits. 
Make no mistake: The loss of these benefits will reverberate throughout our economy as the unemployed can’t pay their bills and another layer of economic problems result. 
All changes don’t have to be bad. Many innovations have come from hard times. North Carolinians are a resilient people who have encountered and overcome adversity in the past.  We might discover new products, services and benefits. We can be hopeful.